Stueve Siegel Scores Victory in 9th Circuit Fair Credit Reporting Act Decision

On May 17, 2019, Stueve Siegel Hanson scored an important victory in the U.S. Court of Appeals for the Ninth Circuit when the appellate court reversed the district court’s decision to grant summary judgment in favor of defendant Experian Information Solutions in a class action lawsuit under the Fair Credit Reporting Act (FCRA).

The decision was handed down just over two months after Norman Siegel of Stueve Siegel Hanson successfully argued the appeal before a three-judge panel in Pasadena, California. 

The underlying case Demeta Reyes v. Experian asserted that Experian, one of the “big three” credit reporting agencies, violated the FCRA by failing to ensure the “maximum possible accuracy” of consumers’ credit reports when it reported more than 125,000 delinquent loan accounts from debt collection company Delbert Service for more than a year after Delbert went out of business and instructed Experian to stop reporting its data. Experian failed to delete the accounts even after Experian employees were put on notice numerous times over a 15-month period that the accounts were improperly reporting in violation of Experian’s own policies. Ms. Reyes sought to represent a class of similarly-situated individuals who had delinquent accounts on their credit reports after Delbert went out of business in January 2015.

The district court granted summary judgment in favor of Experian finding that Ms. Reyes’s credit report was not “materially misleading” and therefore “inaccurate” under the FCRA and that Experian’s conduct was not willful. On appeal, the Ninth Circuit reversed that determination concluding that a reasonable jury could find the Delbert account misleading because it was “no longer verifiable” and Ms. Reyes “could not make [the account] current, despite [Experian] having been specifically informed by Delbert that Delbert was no longer in business.”

The Ninth Circuit also held that given “Experian’s extraordinarily lengthy delay in implementing its internal decision to delete the Delbert accounts (after it made the decision and after it essentially told Delbert that it had deleted the accounts),” a reasonable jury could find that Experian’s conduct was “willful” – entitling Ms. Reyes and the class to statutory and punitive damages. Accordingly, the Ninth Circuit reversed the grant of summary judgment in Experian’s favor and remanded the case for further proceedings. 

Ms. Reyes and the putative class are represented by Norman Siegel and Austin Moore of Stueve Siegel Hanson. Upon remand, the case will proceed to class certification and trial in the U.S. District Court for the Central District of California.

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